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Investing In Australia

Investing In Australia

Australia offers lucrative investment opportunities to residents and non-residents alike. It’s no surprise that the country’s thriving economy continues to attract different types of investors, including institutional investors and individuals. A stable political environment and policy consistency play an integral role in boosting Australia's economic performance and attractiveness.

These attributes have helped propel the country to one of the top-ranked economies for average wealth per adult. Solid legal frameworks help bolster robust corporate governance in Australian companies. Likewise, efficient legislative processes ensure policy consistency while enhancing Australian government efficiency. The country also has a strong financial services sector and provides adequate intellectual property protection.

By investing in Australia, you leverage these critical benefits. In this article, you’ll learn more about the top reasons to invest in Australian businesses and the real estate market. You’ll also become familiar with key sectors that attract increased foreign direct investments (FDI).

Why Invest in Australia?

Many investors choose Australia because it’s a low-risk investment destination. The Asia-pacific nation boasts strong trade ties with countries from various parts of the globe. The World Bank’s 2020 Doing Business Report ranked the country 14th out of 190 global economies. This report assigns rankings as a measure of costs associated with business regulations.

Many people regard Australia’s business-friendly environment and lifestyle as the envy of the world. It has an enterprising and smart workforce that gets the job done efficiently.

This big island is the right place to look for high returns irrespective of whether you want to grow your business ventures or invest in the local stock market. You’re sure to find it easier to diversify your investment portfolio. Diversification boosts the growth potential of your portfolio while reducing the risk of losses.

Key reasons to start investing in the Land Down Under include:

  • Solid legal frameworks
  • Robust economy
  • Abundant natural resources
  • Strategic location
  • Stable politics
  • Consistent economic policies

When it comes to location, Australia benefits from its proximity to some of the world’s fastest-growing Asian economies, such as China and India. These two regional peers have expanded by a factor of seven based on the gross domestic product (GDP) since the early 2000s.

Many business people and investors view Australia as a strategic gateway to Asian markets. Thus, it links the west and the east. Asian countries, including South Korea, China and Japan have strong trade ties with Australia. On the other hand, companies in North America and Europe use Australia as a base to work their way into the subregion.

Australia participates in free trade agreements with the Association of Southeast Asian Nations (ASEAN), including Thailand, Brunei, Singapore and Malaysia.

Can Non-Residents Invest in Australia?

Australia allows non-residents to invest in various aspects of the economy, including Australian shares, investment property, and new businesses. The country is also open to investment in productive sectors. This provision opens doors to startups, research organizations and multinational companies.

Australia attracts increased foreign investment due to its transparency, stability and economic liberalism. Over the years, foreign investors have contributed to Australia’s economic growth.

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Top Sectors for Foreign Investment in Australia</h2>

The country attracts foreign direct investments in several areas. According to the Australian Department of Foreign Affairs and Trade, popular sectors include: Telecommunication, Manufacturing, Mining, Foodservice sectors, Real estate, Financial services, Energy, Construction, Transport and storage.

Depending on investment plans, you can apply to invest through the Foreign Investment Review Board (FIRB). The board considers wide-ranging factors, including investment ownership, visa status and country of residence. As a non-resident, your ability to invest in the property market depends on specific regulations. These rules determine the type of housing you can buy.

Australia’s FDI policies facilitate the creation of jobs in the construction industry by ensuring that foreign investors purchase new properties. Hence, you can invest in new buildings and vacant land. The FIRB approves applications to buy existing buildings on the condition that you plan to demolish the structure and replace it with an increased number of buildings.

For instance, if you purchase a single-family home, you need to replace it with two or more structures (townhouses, multi-family homes or other types of properties). In the end, the investment should augment the local housing supply.

You can expect the review board to approve your application to invest in a new building without stringent conditions. On the other hand, FIRB approves applications to purchase vacant land if you intend to complete construction within four years. When it comes to purchasing a home for personal use, the board approves your application if you hold a temporary residence permit. Authorities expect you to sell the property upon departure from the country.

To pick the right option, consider the location of the property. A well-chosen property in a lucrative area is beneficial in terms of increased demand and capital growth. Properties located close to the beach or the central business district can be appealing to the target market. This approach also applies to properties close to key amenities like shopping centers, public transport hubs, schools, and restaurants.

How Does the FIRB Application Process Work?

Once you’re ready to apply, fill out online forms via the Australian Taxation Office’s (ATO) website. The platform provides access to the “foreign investment in Australia” page. You must have your passport and visa ready before filling out the application. The process also involves providing details of the property you plan to buy. To benefit from the application fee waiver, submit your form with a waiver request.

You must request approval from the FIRB before acquiring the right to purchase the property. The latter means you’ve agreed with the seller to buy the property at a later date. Alternatively, you can sign a conditional contract with the seller before applying for approval with the FIRB. This option allows you to exit the contract if another buyer purchases the property while you wait for approval.

Whether you plan to buy vacant land or a new building, avoid acquiring property without FIRB approval. Failure to seek approval can result in hefty fines or imprisonment (three years minimum). The authorities can also impose fines if you fail to sell the property after the expiry of your temporary residence visa and subsequent departure.

Find More Information About Australia at Relocate

Whether you’re planning to invest in Australia or move to a new country, Relocate is an independent platform for global migration that can help you connect to independent Advisors who have the information and experience you need to make relocating globally an easier process. Dig-deeper into relevant topics and browse through qualified advisors for each country to address your most pressing questions about relocation.

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